Confused & Scared In Missouri

[Ripley]

I sold my house before the real estate bubble burst out west and moved to Missouri. I paid cash for an older modest house and lived off of my proceeds thinking I would be getting a job soon. The job thing hasn't happened.

I have a 2003 Ford Escape with about 22 more months of payments. It's probably only worth what I owe which is around 11K. I stopped paying my CC bills when my savings dried up and had a part-time job making just enough to keep the lights on. I even volunteered n a medical research study and received $1500 to get current on my gas heating bill, a car payment and get current on my other utilities.

Since I own my house, which direction do I go? I read that Missouri only allows 15K for homesteads. I paid 77K for my house. The county has just assessed it for 91K. In this market, there is no way it could be sold for that. I read many threads for both Chap. 7 and 13 and becoming more confused. I have about 25K in CC debt. Do filing either protect my house and my car?

Thanks in advance!

[emoney]

The first thing I would do is to understand that you have an income problem and not much of a debt problem. BK either 7 or 13 will not fix your problem.
Income from any legal source including part time work at WalMart would put a bandage on your financial wounds.
regards,
emoney

[calif]

1. Get a job and work with a non profit credit counseling service.

2. Get a second mortgage, pay off your cards, and sin no more.

3. Sell your home before you are sued and liens are placed upon it.

Good luck!

[Ripley]

The first thing I would do is to understand that you have an income problem and not much of a debt problem. BK either 7 or 13 will not fix your problem.
Income from any legal source including part time work at WalMart would put a bandage on your financial wounds.
regards,
emoney

Being behind several months and having 25K in debt seems like a lot to me. I'm sure the late payment fees and higher interest rates have upped that a lot. I think volunteering for medical research demonstrates I am motivated.

There have been other things that I had to pay for that weren't in my budget while I still had money to live on. There a bad storm last July and a large tree branch fell and broke two roof joists. An ice storm brought down more branches put a hole in my roof and many shingles had to be replaced. Both expenses were completely unexpected.

I hope to be back to work soon and I am just trying to figure out which direction to go from there.

[Ripley]

1. Get a job and work with a non profit credit counseling service.

2. Get a second mortgage, pay off your cards, and sin no more.

3. Sell your home before you are sued and liens are placed upon it.

Good luck!

Thanks for the reply.

#3 is scaring me.

Is it even possible to get a second mortgage with such bad credit and not having a job for very long?

[BassBoy]

Working or unemployed, bad credit or good credit, I would not advise to get a mortgage on your home to clear up the debt. All you're doing is taking and unsecured debt and making secured (lien on home). If you can not pay the mortgage, you lose the house.

With you not working, you obviously can not file a Ch.13...so.....I would suggest to hit the job market very hard. Ch.13's are the best way to keep property, especially when there is more equity than the exemption.

I am not a Ch.13'er so maybe some of veteran Ch.13'ers will chime in here with more advice and suggestions.

[JollyGG]

I'd concentrate on the job search first. Without a job you don't have money to pay day to day living expenses with or without your debt. Try to keep current on the house so to that if you eventually do decide to declare bankruptcy you have more option. However, bankruptcy is probably not going to be your best choice until you find employment. Once you find a full time job you can reevaluate your options and see if bankrupty is the best option.

Right now you have no wages to garnish. Any leins on your home or car can be taken care of if and when you declare bankruptcy. So there is not a whole lot an unsecured creditor can do to you.

[Ripley]

BassBoy, thanks for your input.

JollyGG, my house is paid for.

[JollyGG]

JollyGG, my house is paid for.

You did say that in your original post - Sorry.

Nonetheless your first priority needs to be a job and then worry about your bankruptcy options.

[calif]

You have already indicated you are having great difficulty finding work.
If you can great, if not borrowing on your home to pay off your credit card debt is a lot more sound advise than allowing your home to be sold at auction.
If your creditors sue you and win, your home will be secured property and it may become even more difficult to sell with liens on it.
As far as your ability to borrow on your home, I don't know but I would certainly move in some positive direction and forget about BK.

[lrprn]

Is it even possible to get a second mortgage with such bad credit and not having a job for very long?

No, it very likely isn't possible. Any lending company that would give you a second mortgage with no visible means of income to pay it isn't someone you want to get a loan from anyway. Borrowing money because you don't have enough money to pay the bills you have now is never the right thing to do.

Also with no visible source of income to pay back your creditors over 3-5 years, Ch 13 bankruptcy is not a possibility for you.

The best thing you can do right now is to make 3-4 appointments with bankruptcy-specialty lawyers in your area for free consultations as soon as possible. You will learn a great deal about how bankruptcy works and also get the answers you need to make a good decision in your situation. Good luck - please keep us posted on what you find out.

[calif]

I don't know why I spoke of a second mortgage when I meant a first mortgage loan.
You said you own the house free and clear which under ideal circumstances will allow you to get a favorable rate.
Talk to some private lenders and some others too.
I've heard of at least one person who got a loan on her home who was in your situation.
Of course any high interest rate would be just one more mistake to avoid.
Regardless,if you don't have a definate strategy to make your payments, all this is mute.

Remember, if you do decide to sell your home the sooner you begin, the more alternatives you will have to find ways to exempt your funds before the hounds from hell descend upon you.

[emoney]

From the information that you have shared with us you are in a most unique situation. There are legal issues you need some advice on that are different in each state. In my state, Texas, debts can be made into liens with court action, but homesteads CANNOT be taken thru foreclosure.
Your state is different so you need legal advice for Missouri.
If you sell your home you will have to rent and the money you recieve from the sale can be grabed by the credit card companies once they have gone to court and recieved a judgment for your debts.
Income is your problem and a few dollars per month will keep your credit card issuers at bay.
regards,
emoney

[tofargone]

Whatever you do, do not throw good money at bad. If your home is paid for you pretty safe unless you default on property taxes ( I don't know if your state has those, god knows mine does ) I wouldn't put a lien on it. CC debt is unsecured therefore they will have a hard time getting anything from you like your home.

I would have to agree with most others, concentrate on a job. You need to decide how much you need to work, but at least get something that will make it possible to pay day to day expenses and also sock a little away.

Once you have a job that works for you, then I would consult an attorney to get specifics.

[wrinkleigh]

I would get a job -- anywhere making anything -- flipping burgers for $7.00 an hour would fund a 13.

You own your house -- so 7 is NOT an option.

I agree you should not take out a mortgage on your home, if you cant afford what you have now.

You could sell your house -- take a hit, but since you dont owe anything on it -- you could do a short sale, offer it for 50K or so, and sell it quick because it is so underpriced. You could pay off your debt, and still have 25k to start over.

Good luck.